It’s very curious that Obama is on a mission to cut the deficit. Weren’t the Keynesians just arguing that we need to dramatically increase deficit spending to stimulate the economy and pass a gigantic stimulus bill? You know the rationale: it doesn’t matter what the government spends money on as long as money is injected into the economy. They could buy cars from GM and drive them into the ocean, and the jobs created at GM would still be a net gain for the economy. And now Obama is going to cut the deficit?
I’ll bet that nothing is cut from the deficit. In the end, money will be shifted from Republican constituencies to Democratic constituencies. Politics will be done as usual, and nothing to truly help the economy will be done as usual.